The question here is whether an insurer can cancel a policy by accepting its surrender from one neither the named insured nor the agent of the named insured. The District Court's answer obviously was in the negative. And we agree.

The facts are amazingly simple: Kenneth and Dorothy Gorbet were married from April 4, 1950, until a divorce on May 12, 1954. Two years before this insurance controversy arose, Kenneth, by formal Texas Motor Vehicle Assignment of Title, transferred to Dorothy, title to the Studebaker car. Hoskins v. Carpenter, Tex.Civ.App., 201 S.W.2d 606, writ refused NRE. The Studebaker was, and continued to be, her separate property. Belkin v. Ray, 142 Tex. 71, 176 S.W.2d 162; Story v. Marshall, 24 Tex. 305, 306; Forman v. Glasgow, Tex.Civ.App., 219 S.W.2d 845.

In January 1954 Kenneth's business (a community activity, of course), Gorbet Lawn Sprinkling Service, obtained needed funds by a bank loan. Put up as part of the collateral demanded by the bank was Dorothy's Studebaker. The bank required insurance. On January 30, 1954, Kenneth obtained from Harford's authorized agent a Texas Standard Combination Automobile Policy which listed Kenneth L. Gorbet as the "name of insured." When Dorothy learned, within a few days, that the policy was in Kenneth's name, she informed Harford's agent that she was the owner and requested that the policy be corrected accordingly. This was done by Harford's agent affixing to the original policy (then in the bank's hands) a Texas Form 64 General Change Endorsement.1 Kenneth, learning of this within a few days when he saw a confirmation copy of the endorsement which Harford had mailed to Dorothy, was somewhat annoyed, but, acquiescing fully without protest either to the bank or to the insurer, impliedly ratified Dorothy's acts. As between Dorothy and Harford, therefore, she became,2 as of the date of the original issuance of the policy, January 30, 1954, the named insured.

In April, domestic tranquility ceasing or diminishing, a divorce was agreed to by each, and by property settlement contract of April 16, 1954, later approved in the divorce decree of May 12, 1954, Dorothy was to have, amongst other things, the Studebaker car.3

To free the Studebaker, Kenneth, with the bank's permission, substituted another vehicle. Since insurance on it was likewise required, Kenneth, following instructions obtained by informal discussion with Harford's agent as to how the policy could be cancelled, obtained the original Studebaker policy of January 30, 1954, from the bank and in the early part of May took it to Harford's agent where the agent purported to cancel it as of April 30, 1954.

At that time the policy showed on its face that Dorothy was the named insured.

Harford's agent made no inquiry4 as to Kenneth's right to surrender his wife's policy. The agent was ignorant, however, of domestic strife, the impending divorce, or the plan to divide property including the insured vehicle.

Harford, entreating us so eloquently for literal, eye dotting and tee crossing compliance with its own contract, finds itself thus in the position of having ignored altogether the simple, plain words of its policy:

"22. cancellation: This policy may be cancelled by the named insured by surrender thereof or by mailing to the company written notice stating when thereafter such cancellation shall be effective. This policy may be cancelled by the company by mailing to the named insured at the address shown in this policy, written notice stating when * * * such cancellation shall be effective * * *." (Emphasis supplied.)

It seeks to justify this by an intricate argument5 based on Texas Community Property Laws, Vernon's Ann.Civ.St. art. 4619 et seq., the nature of this contract as community rather than separate property, the incapacity of Dorothy, as wife, the right of Kenneth, as husband, exclusively to handle and manage community property (the insurance policy) and the like.

But we find it unnecessary to explore these engaging possibilities. Harford made a contract with Dorothy. It did not, as between insurer and assured, become less her contract even though the funds to pay for it may have come from an outside source, community, or otherwise. She had excellent reasons6 for insisting that she be named as the contracting party.

Whatever the rights may have been with respect to this policy as between Dorothy and Kenneth, between creditors of the community and either of them or Harford, between Harford and Kenneth, or between any of them and the United States as the ubiquitous tax collector, this was a simple contract between Harford and Dorothy. It agreed that it would cancel only by notifying her in writing or by accepting from her the surrender of the policy. It did neither. For good or bad reasons, it chose to rely on another (Kenneth) who, in these circumstances, had neither actual nor apparent authority for her. Harford failed to heed the words of its own creation and that was fatal. Gulf Insurance Company v. Riddle, Tex.Civ.App., 199 S.W.2d 1000; Duff v. Secured Fire & Marine Company, Tex.Civ.App., 227 S.W.2d 257; Suennen v. Evrard, 254 Wis. 565, 36 N.W.2d 685, 8 A.L.R. 2d 200; Tarleton v. De Veuve, 9 Cir., 113 F.2d 290, 132 A.L.R. 343, certiorari denied 312 U.S. 691, 61 S. Ct. 710, 85 L. Ed. 1127.

The policy was never cancelled and was, therefore, in full force when Dorothy's son, using the car with her permission, had the accident of June 6, 1954. Out of this accident arose the claim of damages by injured third parties asserting negligent operation of the vehicle. Harford declined to defend, disclaimed all liability, and sought a Declaratory judgment of non-liability. The District Court's declaration that the policy applied and was in full force was correct.

Affirmed.